TITLE XXXV BANKS AND BANKING; LOAN ASSOCIATIONS; CREDIT UNIONS
CHAPTER 383-E CREDIT UNION ACT
ARTICLE 4 Powers of Credit Unions
Section 383-E:4-405
383-E:4-405 Corporate Securities. –
The following described securities are legal investments:
(a) Obligations in the form of bonds and notes issued, assumed, or guaranteed by entities incorporated in the United States of America. The obligations shall be among the 3 highest ratings of any NRSRO. Convertible bonds of a lesser rating will be legal if the common stock would otherwise qualify.
(b) All preferred stocks issued, assumed or guaranteed by entities incorporated in the United States. The obligations shall be rated among the 3 highest ratings of any NRSRO.
(c) The common stock or senior securities convertible into common stock of entities incorporated in the United States of America provided:
(1) The stock is listed on an exchange and is ranked among the 3 highest ratings of any NRSRO.
(2) At the time of purchase, any common stock investment under this section when added to the book value of all other common stock securities presently owned of the same entity shall not exceed 5 percent of a credit union's capital funds.
(d) The bonds and notes issued, assumed or guaranteed by any entity organized under the laws of this state or carrying on its principal manufacturing within this state, provided that:
(1) The entity shall have, at the date of investment, a net worth of at least $1,000,000; and
(2) In at least 4 of the 5 years next preceding the date of investment, the net income available for interest plus the federal income tax of the entity shall have been not less than twice the interest on its obligations.
(e) The dividend-paying capital stock of any entity organized under the laws of this state or carrying on its principal manufacturing within this state, provided:
(1) All securities, if any, senior to such stock are legal investments hereunder, and the entity shall have at the date of such investment a net worth of at least $1,000,000.
(2) In at least 4 of the 5 years next preceding the date of investment, the entity shall have earned net income available for dividends on the entire outstanding issue of the stock in question of not less than 4 percent on the par or stated value of such stock.
(3) No credit union shall hold more than 5 percent of the outstanding stock of any entity.